The International Islamic Trade Finance Corporation (ITFC) (www.ITFC-idb.org), member of the Islamic Development Bank (IsDB) Group, released today the fifth edition of its Annual Development Effectiveness Report titled ‘Embracing disruption to build back better’, addressing the overwhelming disruptive impact the COVID-19 pandemic has had on the world. The report highlights how the pandemic created opportunities that can be leveraged to overcome the challenges it has imposed on every market.
The Annual Development Effectiveness Report (ADER) report showcases ITFC development effectiveness by focusing on certain thematic or operational aspects of its interventions. In 2020, ITFC featured organizational resilience to navigate disruptions, deliver results, approving US$4.7 billion of trade financing, including to benefit 21 OIC member countries. Responding to the pandemic’s unprecedented economic impact, ITFC swiftly reacted to its members countries needs through an ambitious and timely US$850 Million COVID-19 Response Plan to mitigate the impact of the pandemic and sustain trade supply chains.
Commenting the Institution’s achievements in 2020, Eng. Hani Salem Sonbol, CEO, ITFC said, “As the pandemic unfolded, ITFC reacted swiftly to help member countries respond to the immediate public health emergency and ensuing social and economic impact. The ITFC response to the crisis aimed at supporting our clients to meet their immediate needs during the outbreak and strengthening their long-term resilience to external shocks. ITFC support was delivered through a blended approach combining trade finance facilities with grants, enabling us to extend support to those clients who were most in need.”
The COVID-19 pandemic has shown just how critical Development Finance Institutions (DFIs) are in moments of crisis. The ensuing health and economic crisis prompted by COVID-19 called for rapid, large scale and previously unprecedented responses. ITFC’s interventions in 2020 main objective was supporting member countries recovery through restoring livelihoods, building resilience, and kick-starting economic growth. In support of these objectives, ITFC placed particular focus on supporting MSMEs, sustaining agriculture value chains and building capacities to begin addressing the challenges posed by the pandemic. Moreover, ITFC laid the foundations to build back better in a post-COVID-19 world.
A more inclusive, sustainable, and resilient future for OIC member countries can be achieved by increasing focus on policy dialogue, SDGs, regionalization, and embracing technological disruptions as key tools for better impact, which is demonstrated by some ADER highlights:
Health: In 2020, ITFC disbursed US$ 15 million to mitigate the immediate health impact of the pandemic. The financing enabled member countries to purchase PPE, testing and health-related equipment, and pharmaceutical products to strengthen their capacity to respond.
- The financing benefited member countries such as Maldives, Suriname, Benin, Palestine, Tajikistan, and Burkina Faso.
- Overall, an estimated 62,000 patients, 2,500 health workers and 40 medical facilities have benefited
Food Security: US$484 million disbursed towards food imports to ensure that over 25 million households in members countries have access to affordable, safe and sufficient food
- 1.1 million tons of wheat, 220 000 tons of rice, and 15 000 tons of sugar have been purchased in Egypt, Suriname, Maldives, Mali, and Tajikistan, among other countries
- US$200 million disbursed in favor of AfreximBank and utilized to purchase 206,611 tons from different food commodities (soya beans, groundnuts, maize, sesame seeds) across 10 African member countries.
- ITFC food financing increased by 15% compared with the previous year and benefitted over 25 million households in member countries
Agriculture: Over 600,000 farmers benefitted from ITFC pre-export and inputs financing, and capacity building initiatives, worth a total US$240 million
- Agriculture financing has been on a constant increase since 2018, growing respectively by 3% and 13% from 2019 and 2018 levels. The financing benefitted over 600,000 farmers in Africa and Asia
- The value of cotton and groundnut exported to international markets by ITFC agricultural clients reached US$ 360 million.
Energy: US$2.7 billion were disbursed to secure the supply of energy inputs in member countries, supporting over 8 million households to access electricity.
- ITFC’s main comparative advantages is its capacity to leverage large amounts of financing from international markets to fund large-sized syndicated deals and meet member countries' needs
- 33% of the energy financing was allocated towards the Least Developed Member Countries
- In 2020, around 22% or ITFC energy portfolio was allocated to the purchase of LNG, the “cleanest” fossil fuel.
Private Sector: US$373 million channelled through 26 partner banks towards 7,500 SMEs. ITFC has also scaled up its West Africa SME’s Program aimed at improving access to finance for SMEs to support them during the COVID-19 economic crises.
- ITFC launched LC Confirmation products to support the private sector and SMEs in member countries with recovery from the impact of COVID-19.
- In 2020, MSME support became an even greater focus of ITFC operations, becoming one of the key pillars of the COVID-19 Response Program. ITFC has approved 11 Line of Finance worth US$133,2 million as part of the IsDB Group SPRP for the COVID-19 Pandemic.
- In 2020 alone, ITFC established new partner-ships with Banks and FIs in member countries such as Bangladesh, Maldives, Cote d’Ivoire, and Uzbekistan. The total number of private sector clients increase 25% compared to last year.
In 2020, ITFC approved 80 transactions worth US$4.7 billion of trade finance benefitting 21 member countries; Disbursements reached US$4.1 billion.APO Group on behalf of International Islamic Trade Finance Corporation (ITFC).
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About the International Trade Finance Corporation (ITFC):
The International Islamic Trade Finance Corporation (ITFC) is a member of the Islamic Development Bank (IsDB) Group. It was established with the primary objective of advancing trade among OIC member countries, which would ultimately contribute to the overarching goal of improving socioeconomic conditions of the people across the world. Commencing operations in January 2008, ITFC has provided US$55 billion of financing to OIC member countries, making it the leading provider of trade solutions for these member countries’ needs. With a mission to become a catalyst for trade development for OIC member countries and beyond, the Corporation helps entities in member countries gain better access to trade finance and provides them with the necessary trade-related capacity building tools, which would enable them to successfully compete in the global market.
International Islamic Trade Finance Corporation Releases 2020 Annual Development Effectiveness Report ‘Embracing disruption to build back better’